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Richard Pearson

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  • Why Retail Got Slaughtered On Ziopharm [View article]
    In the past the institutional ownership was more like 40% but it rose some over time. It is always a little difficult to get an exact number because it seems there are always bad or late data included.

    The point I was trying to make (which I guess I wasn't clear) is that if we exclude Kirk and Fidelity (who was likely only in because of Kirk), then inst ownership is almost nil.

    With the presence of Kirk and Fido in there then we should have expected to see total institutional ownership of at least 80-85%, but instead it was the remainder of all retail.

    Sorry, I should have been more clear.
    Mar 27 08:51 AM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    Thank you for pointing this out.

    As we know, JMP has a direct dialogue with ZIOP, so before putting out this comment, they could have easily gotten clarity from management on the following key information....yet those chose to leave it vague.

    1) WHEN was the independent audit conducted ? Was it before or AFTER the early stopping of the Ph 2 trial ?

    as I have previously demonstrated, Chawla made no reference to it in response to FDA on Sep 14, but the trial was halted within just 2 weeks as a success. FDA audit lasted 3 weeks, and was simpler in scope because it only sought to identify problem areas, not to "prove" that there was no impact on data. any sensible analyst should have asked WHEN the "independent audit" was done, rather than simply repeat a blanket statement by mgmt.

    2) JMP's statement about the overdose has been widely misinterpreted to mean that the letter "had nothing to do with" Ph 2. Which is obviously incorrect, because it did.

    3) anyone who goes to clinicaltrials.gov can quickly see that Chawla has been involved in over 300 clinical trials. his participation in other trials does nothing to fix the violations in this particular trial. in fact, investors in ZIOP could care less about his violation-free performance in other trials, because all they care about is the "reliability and integrity" of the data in the trial for ZIOP's Pali. Is JMP really telling us that we should ignore the violations in the one study we care about, just because Chawla didn't have violations in other studies ??

    None of this is to even remotely suggest that Chawla is a bad doctor or an incompetent clinical investigator. The only implications are that a) there were problems in a study that we care about,
    b) the problems were not disclosed by ZIOP,
    c) the study was concluded PRIOR TO the independent audit and
    d) PRIOR to the resolution of Dr. Chawla's regulatory probs (2010), e) PRIOR TO the early halting of Phase 2 as a success
    f) ZIOP continued to use Chawla despite past violations (if his regulatory issues were resolved, and the data independently verified etc, this decision could be defensible.... but given that the Ph 3 study has over 150 investigators involved, why would it be so necessary to include Dr Chawla, when a safer more conservative decision would be to exclude the investigator due to past violations ? Is Chawla really that NECESSARY to the study ? If so, WHY ?

    thanks again for your comment

    rp
    Nov 1 10:55 AM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    Thanks for your comment.

    And for the records, I too hope that we will see more treatments for STS as well as other cancers.

    Some people have taken issue with the fact that I have directed my comments towards a company which is focused on helping people with a hard to treat, terminal illness. They feel that this is unconscionable.

    To these people, I have suggested this:
    If this drug works so well, why has ZIOP not released the detailed results of Ph 2 ? Why did ZIOP halt the Ph 2 trials early, BEFORE ever auditing the Chawla data and before the FDA issues were even resolved ? If these issues didn't matter, then why didn't ZIOP disclose ? Only ZIOP knows the answer to these questions, and ZIOP isn't telling us.

    ZIOP's share price is where it is because the company has led us to believe that it has a drug with great potential for treating STS.

    If it turns out that this drug is marginal (or useless) then ZIOP wil have distracted investors and the medical profession from other drugs which could have greater effectiveness. IF this is the case, then ZIOP would have knowingly strung people along for years, while they are trying to figure out a new direction for the company (ie Intrexon 5-10 year plan).

    That would clearly be unconscionable, and my pointing it out would no doubt be a virtuous deed, for investors, for the medical profession and for cancer patients.

    This has not happened yet. No one will know until we actually see Ph 3 data, which I believe we will see in March / April (or later).

    I encourage all readers to feel free to refer back to this and any other of my messages, and feel free to thank me or chastise me accordingly.
    Oct 31 12:41 PM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    Dear Steve,

    I continue to thoroughly enjoy our lively online debate.

    I also appreciate the fact the you were "wrong" in calling me inaccurate, and have now switched to just misleading (but accurate).

    Thank you again for spending so much time to help flush out what is accurate and what is not. I know that this matters to you.

    Some people focus in on selective items that in isolation might help to support a historical view that they cling to in spite of new information.

    But you take a big picture view and evaluate new information strictly based on its relevance and content, without disregarding it due to a simple dislike of the messenge

    I congratulate you, sir, for your ability to keep calm, cool and objective in a dynamic and intellectually challenging situation.

    Over the long term, this ability of yours will continue to serve you well, and I firmly believe that you will prosper accordingly.

    Regards,

    Rick
    Oct 31 12:24 PM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    Apologies, when I used the term "free" I should have used what was in the 8K. The shares are not "free" they were given to intrex for $0.001 (ie. one tenth of one cent....) But once again, you got me. One tenth of one penny is not actually free. In fact it means that on this tranche, Kirk paid $3,660 (three thousand six hundred sixty six dollars) in exchange for 7.495% of the entire company !! What a great deal, even I would buy ZIOP at that price. And note, that was only PARTIAL consideration given to Kirk, meaning that he got even more of these (almost, but not quite) FREE shares. see below.

    [Here is the first tranche 7.495% of company at $0.001 per share]
    [The caps emphasis was added by me. No change to any language]
    At the same time, the Company has agreed to issue to Intrexon a number of additional shares of Company common stock equal to 7.495% of the number of shares of Company common stock issued and outstanding prior to such issuance (the “First Tranche Shares”) at a purchase price equal to the $0.001 par value of such shares, which price will be deemed paid in PARTIAL CONSIDERATION consideration for the execution and delivery of the Channel Agreement.

    [Here is the second tranche...an ADDITIONAL 7.495% also for $0.001 per share - but as you note, not actually "Free"]

    The Company has also agreed to issue additional shares of Company common stock to Intrexon upon dosing of the first patient in a ZIOPHARM-conducted Phase II clinical trial in the United States, or similar study as the parties may agree in a country other than the United States, of a product that is created, produced, developed or identified directly or indirectly by the Company during the term of the Channel Agreement and that, subject to certain exceptions, involves DNA administered to humans for expression of anti-cancer effectors for the purpose of treatment or prophylaxis of cancer. Upon satisfaction of such contingency, the Company has agreed to issue to Intrexon an additional number of shares of Company common stock equal to 7.495% of the number of shares Company common stock issued and outstanding immediately prior to the First Tranche Closing (the “Second Tranche Shares”) for a purchase price equal to the $0.001 par value of such shares, which price will be deemed paid in Partial CONSIDERATION for the execution and delivery of the Channel Agreement.

    PARTIAL CONSIDERATION - what does that mean ?

    it means that in exchange for his $11.6 million dollars, Kirk got over 9 million shares of ZIOP...but he is entitled to get even more going forward, including 50% of profits from Intrex products, and additional cash payments....

    Mr. Kirk is indeed a genius.
    Oct 31 11:02 AM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    ummmm....yes, Pali tris is the well-known "stabilized form" of Palifosfamide. Their first attempt at stabilizing Pali lysine was totally unworkable, so they DOUBLED the stability time with Pali tris, which is still so unstable that it only has 30 min in bag, and is far far less stable than comparable drugs for comparable indications. The fact that they have gone through to formulations to get here shows that they KNEW this was an "issue" - the current Tris formulation is by no means "fixed".

    Some people (ie. longs) are starting to find this out by contacting the company directly or by speaking to chemo professionals (ie. oncologists, pharmacists, chemo nurses)

    I suggest you do the same, rather than simply taking a guess about what the use of Tris means.

    Really ! Call ZIOP and ask them. Did they every even study the commercial impact of 30 minute limit in the bag ? Why do they expressly note that 14.6% NaCl should be used "if available"...and then specifically point out that one should use 0.9% NaCl when 14.6% is not available ? It is because the recognize the stability "issue" (aka "problem") and attempt to use a non standard diluent to help boost stability. But since 14.6% is typically "not available", they let us know that hospitals will be using 0.9% in practice - ie. it is an "isssue" (aka "problem")

    dont trust me on this. ask ZIOP directly and then ask a few chemo nurses in practice.
    Oct 31 09:06 AM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    because you didn't specify the saline content. are you assuming the standard 0.9% saline solution which is typically used by hospitals because it is approximately the same salt content as human blood ? or are you referring to something like the 14.6% solution that Abbot resulted in the lawsuit with Abbott when a young child was accidently given 14.6% and ended up with brain damage ? As we both know, higher salt content helps all fast decay drugs with stability, so clearly the 14.6% would be better for ZIOP...except that it is in shortage across the country...oh, and even with 14.6% the drug is still less stable than any other chemo drug for comparable indications (ie. same problem) - in answer to your question though...in 0.9% the solution must be put into IV bag within 60 minutes, with 14.6% (if even available) this goes to 120 minutes...but ZIOP knows that 14.6% is often not even available which is why they specifically point this out in their docs....this means they DO in fact KNOW about the stability "issue" because their own docs point out the problem.... and if you ask any random chemo nurse about the reality of 60-120 minutes in a real chemo ward, they will tell you that it is an "issue" for sure.

    and to be clear - I already addressed the saline stability of Pali in my original article on Oct 19, since you haven't read it, perhaps you should spend a few moments and do so.

    so...ummm...what was your point again ? was it that "Pearson doesn't know the answer" or was it that "Pali has stability issues". I assume it was the later, because your question proves my point. again.

    ps - thanks again for the comment !
    Oct 30 04:47 PM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    As is becoming common....the data you are relying on from Yahoo is wrong. Period. When people are too lazy to read actual filings, they then post information that is wrong and other people start to rely on that information. I will be putting out an article or instablog (depending on length) on the RJ Kirk ACTUAL investment details shortly.

    The following 8K from Jan 2011 describes Kirk's initial purchase in great detail, and it shows that yahoo's automatically generated data is 100% wrong. http://bit.ly/TUimlr

    If you look at the details he ended up acquiring a 14.5% stake in ZIOP for just 9 cents per share. I am not kidding nor am I lying. If you are not already aware of this fact, then it is only because you have not read the filings.

    As shown in filing describing the Channel Partner Agreement:
    Kirk / Intrexon "paid" $11.6 million for an initial tranche of ONLY 2.4m shares = $4.80 per share. That is why Yahoo says $4.80 per share.

    However he also immediately received 3.6m shares for FREE ! If you do the math, that means he really only paid $1.91 per share.

    That initial purchase also entitled him to 3.6m MORE FREE SHARES upon Phase 2 dosing, which he received last week. This means he has now received 9.7m shares under the Channel Partner Agreement in exchange for $11.6m cash. This is $1.20 per share. (feel free to check my math).

    It gets better, under that same agreement from 2011, ZIOP has now already GIVEN BACK to Intrexon $10.7m. See here.

    http://bit.ly/RufXtt

    So the economics of this transaction are as follows:
    1. Kirk/Intrex gives $11.6m to ZIOP
    2. Kirk/Intrex receives a total of 9.7m shares ($1.20/sh)
    3. ZIOP then gives Kirk/Intrex back his money ($10.7m)
    4. So Kirk's real cost is....$900,000 for 9.7m shares
    5. This is only 9 cents per share - effectively free

    This is the true look-through economics of the transaction and is how any institutional investor would look at them. This is also why Kirk could feel safe saying "he didn't even bother to due due diligence" on Pali - see link.

    http://onforb.es/TUilxR

    It reflects how much did Kirk ACTUALLY pay vs. how many shares he received. Yahoo states that Kirk paid $4.80 on 9.7m shares, which we know is wrong because Kirk received fully 75% of those shares for FREE. Yahoo says that Kirk "paid" $29m for these shares, even though he only paid $11.6m as expressly shown in the filing.

    So please check your numbers before posting things like this. This is obviously very detailed and requires more than just clicking Yahoo and reading. I am well aware of this and I assume that it was an accident / oversight on your part.

    The subsequent numbers on Yahoo are mostly (but NOT ALL) correct.

    After the initial 9.7m shares at 9 cents, Kirk did spend an additional $27m at average prices of $5.28 per share over 18 months. (the yahoo numbers on these purchases are mostly correct and consistent with SEC filings)

    The net result of all of this is that following his new free shares received last week, Kirk owns 18% of ZIOP at an all in price of $1.92 (almost identical to his initial CPA price). 14.9m shares total, all in in price of $1.92.

    Kirk has been able to achieve that even though the stock during that time has ranged from $3.85-$7.70 (prior to my article)

    So Kirk was able to acquire 18% of the company at a price which is LESS THAN 1/2 OF THE 2 YEAR LOW.

    Based on this, I continue to state that Kirk is in fact a genius.

    Unfortunately, the rest of us do not have the ability this way and are forced to punt on a biotech stock at $5.00 +/-. If this stock drops by 60%, RJ Kirk will not lose a single dime. Unlike the rest of the world, ie. retail investors in ZIOP.
    Oct 30 03:57 PM | 3 Likes Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    Prior to my article I had submitted a number of questions to ZIOP management both by phone and by email. The acknowledged the receipt of my questions and assured me a prompt response. But I never received anything back, and still haven't.

    If you do get a response, many readers would certainly like to see it, so I hope you will consider posting their response publicly. I express this view regardless of whether or not the response is in my favor or not. More info is always better for everyone.
    Oct 29 03:16 AM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    For someone who has "been in biotech for 25 years" your description of the FDA approval process is surprisingly...wrong. Over those 25 years you would no doubt have learned that the the FDA doesn't even remotely "pass" a drug on Phase 2 trials. Instead, the approve the design of the Phase 3 trial and let it proceed if the sponsor chooses to as long as the sponsor can claim some level of effectiveness based upon data which the FDA does not review. You would also know quite well that the FDA isn't even remotely able to conduct such analysis on the numerous early-mid stage drugs that reach Phase 2 - they don't have the budget or the staff to even make it possible. To verify this, interested parties should review the budget and staffing data which prove the point for the FDA in 2012 at http://1.usa.gov/QPmChN
    Readers should find the level of underfunding and understaffing disturbing given the scope of the FDA's declared mandate.

    I would suggest that readers call the FDA directly, however it took me over 2 weeks to get a call back from anyone despite the alarming messages I left concerning a public health issue. I was not calling central recorded lines, I was calling the direct extensions of senior FDA officals, none of whom answer their phones and all of which go straight to voice mail with no option to hit "0" to speak with a live person. For those who wish to repeat this experiment, I am confidant that within 2 weeks or so you will no longer place much faith in the FDA approval process or infer any significant validation due to "passing" phase 2.

    Another link you may find informative is this one, which is basically "FDA approvals for Dummies"
    http://1.usa.gov/XIVgxq

    But after 25 years you must know all of this. It is just surprising that you would say otherwise.

    I was however impressed about your detailed knowledge of the SEC inquiry. None of the details you state above have been made public and are known only by ZIOP and the SEC. I have made every effort to find out more through my own discussions with the SEC and review of all public filings, and have not seen any reference to the Phase 2 Warning Letter, or even to Phase 2 at all. This includes the 8K which you seem to be referencing. http://bit.ly/Rgq6rG

    At no point in time has the SEC given any indication that their inquiry is closed, and it certainly has never ever stated that " this was not a material matter that needed to be disclosed".... I have personally called the SEC to get such clarity and they will give none.

    So while I wold like to "trust you" as a "former CFO of a NYSE company", the statements you have made above are materially and provably incorrect. Unlike you, I never ask anyone to ever "trust me". Instead I provide links to the data and the public filings that prove what I say. I also encourage people to be skeptical of my findings and verify details for themselves. Interested parties can contact the US SEC at 1-800-SEC-0330 to learn how to get more info on this subject. It takes patience and a number of phone calls, but it will allow individual investors to stop "trusting" you or me and determine for themselves.

    Finally, you are right about one thing. PPHM did disclose its problems voluntarily. This is why I said that ZIOP is WORSE than PPHM. Your lack of respect for proper disclosure practices is concerning given that you claim to be the "former CFO of a NYSE company". And your repeated posting of inaccurate data regarding Kirk's purchases, the Dec '11 8K and the FDA approval process strikes me as either sloppy to the point of negligence, unethical, or both.
    Oct 29 03:16 AM | 3 Likes Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    Your statement that this was " REVIEWED IN DETAIL BY THE SEC AND FOUND NOT TO BE MATERIAL" is entirely and provably false as I posted in my previous comment. Either you know this and are lying, or else you are simply saying it without reading. Either way, by making statements which are so obviously false and so easily be proven false, you have made it clear that no one should believe anything you say. Once again, for your reference, the 8K which you blatantly misquote is here: http://bit.ly/Rgq6rG. It contains no mention of the FACTS that you claim. And again, the SEC can be reached at
    http://1.usa.gov/viWoSv#
    1-800-SEC-0330 (general number as a starting point...you really want to speak with enforcement)

    Readers will ultimately want to speak with the division of enforcement regarding ZIOP. They will not confirm the conclusion of any inquiry or investigation until it has been formally closed. So far I have been unable to confirm conclusion of the inquiry into ZIOP. So people can draw their own conclusions.

    While you are there (enforcement), you may feel free to submit a complaint regarding my writing and activities. But before doing so, you should read the definition of "Manipulation" as defined by the SEC on that page. The only way I get in any trouble whatsoever is if I knowingly provided untrue information. Given the number of links I have painstakingly included to publicly available information for each and every point I have made, it will be very difficult for anyone with any experience to point to anything I said as being inaccurate.

    This is in stark contrast to the blatantly and provably false statements you have made in these lengthy and numerous comments, which I have refuted along with links so that other readers can verify.

    But again, please feel more than free to submit your complaints to the SEC. I am very, very comfortable with my legal position in this matter due the factual nature and demonstrable proof of everything I have said. And in fact, if the SEC starts taking a closer look at me, the only way they can evaluate me is to evaluate the serious observations I have made. Given the very clear fact patterns I have highlighted, I feel strongly that if the SEC decides to focus on the issues at ZIOP (including the press release on Oct 19, and extending back to 2009), that they will develop a keen interest in ZIOP. Given that I have already written out a 4 year road map, an investigation would now be very easy for them. Unless of course they have already started one....

    Also, now you have graduated from "former CFO" to COO, CFO and board member. What should we expect of you next, "former biotech billionaire" ?

    I find it very interesting that a very small number of anonymous posters with such impressive backgrounds such as yours and that of Wall Street Teacher make such a persistent and impassioned defense of ZIOP by posting information which is verifiably false even upon a quick glance at the filings you reference. Just like WST, you have now attracted my attention. Hopefully you do not have an undisclosed relationship with any of the companies you write about, because if so, you can be sure I will uncover it, now that you got my attention. regards. rp
    Oct 29 03:01 AM | 1 Like Like |Link to Comment
  • Richard Pearson Responds On Ziopharm [View article]
    Many thanks for that insightful cut and paste from Yahoo Finance. I'm sure you no doubt noticed the significant error in the data you posted. If not, I will explain it more clearly in my next article. (Hint: what was the REAL "transaction value" of Kirk's purchases. Second hint: you will need to actually read the SEC filings, not just click on Yahoo Finance, which is obviously wrong, you will also need to string together several filings, not just read one). I hope you enjoy my analysis of the REAL #'s. Following my publication of the accurate numbers, I hope you will issue a correction to the erroneous data that you listed above, because I'm sure it was just an accident on your part. regards. rp.
    Oct 28 11:29 PM | 1 Like Like |Link to Comment
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